Case Law Updates: Equitable Distribution; Divorce, Remarriage and Divorce

By Daphne Edwards and Becky Watts

Equitable Distribution, Miller v. Miller, COA 16-486, April 18, 2017

In Miller v. Miller, the Court of Appeals addressed procedural and substantive issues regarding an equitable distribution claim. First, the Court of Appeals addressed application of N.C.R. Civ. P. 60(b)(6) to determine whether the trial court properly set aside a judgment of absolute divorce to allow the Wife to pursue an equitable distribution (hereafter “ED”) claim. The Court held the trial court properly entered its order vacating the divorce judgment under Rule 60(b)(6) to allow the Wife to pursue an ED claim. Specifically, Wife had filed a complaint for divorce from bed and board and ED at a time when the parties were not living separate and apart. The trial court granted her divorce from bed and board claim and the parties began living separate and apart on March 21, 2012. A consent order was entered on April 16, 2012, in which the court republished the Wife’s ED claim. Motions were entered regarding ED and the parties mediated the claim unsuccessfully in December 2012.

On March 22, 2013, Husband filed a complaint for absolute divorce. On May 22, 2013, the court granted the divorce judgment. On Aug. 5, 2013, Husband filed a motion to dismiss Wife’s ED claim due to lack of subject matter jurisdiction, alleging he had not counterclaimed for ED. Wife filed a Rule 60(b)(6) motion. On Oct. 23, 2013, the court held a hearing and held granted her Rule 60(b)(6) motion and set aside the divorce judgment, announcing it in open court. Husband, despite hearing the court’s ruling, got married five days later, before the entry of the court’s order vacating the judgment. Husband filed a motion to reopen the evidence, and the court entered its order granting Wife’s Rule 60(b)(6) motion setting aside the divorce judgment.

On appeal, the Court applied the Rule 60(b)(6) test, being whether extraordinary circumstances exist and the action is necessary to accomplish justice and held the trial court properly set aside the divorce judgment to allow Wife to pursue an equitable distribution claim.

Husband argued also on appeal that the trial court erred in failing to provide for an in-kind distribution and ordering the sale of real property regarding the marital home and property in Virginia. The Court of Appeals found that the trial court had failed to value the four largest assets of the marital estate. In the ED spreadsheet attached to the order, the court listed 50% of such assets to be divided without stating each assets value. The Court reversed and remanded to allow the trial court to make adequate findings.

The Court of Appeals found that the trial court erred in failing to consider all distributional factors and remanded for findings on such. The Court also held that there was not competent evidence to support the trial court’s determination that certain real property was valued at $5,000. Finally, the Court held it was error to find that Husband’s car was separate property, and debt attached, separate debt, and remanded to make findings reclassifying it.

Divorce and then subsequent remarriage of parties, Rule 41(a) of the North Carolina Rules of Civil Procedure, Joint dismissal of alimony and equitable distribution claims following entry of judgment for absolute divorce in first marriage, Refiling of alimony and equitable distribution claims based on first marriage after failure of second marriage,  Farquahar v. Farquhar,  COA 16-1271, July 5, 2017

When the parties separated in 2003, Wife filed an action for DBB, ED, PSS, and alimony and Husband counterclaimed for ED.  The parties divorced in 2004, prior to the resolution of the alimony and ED claims.  In 2005, the parties remarried.  At the time of remarriage, the alimony and ED claims brought in 2003 were still pending, but shortly after the date of the second marriage husband and wife dismissed their pending claims.  The parties separated again in 2015 and Wife asserted claims for DBB, PSS, alimony, and ED.  Wife then also filed a complaint in Superior Court asking for ED, alimony, and attorney fees related to the first marriage.  Husband filed a motion to dismiss the Superior Court action, arguing lack of subject matter jurisdiction over claims arising from the first marriage.  The Superior Court Judge agreed with Husband and dismissed for lack of subject matter jurisdiction.  Wife appealed.

On appeal, Wife argued that she could not have refiled alimony and ED claims during the second marriage and so the provision in Rule 41(a) that allows a party to refile an action within one year of dismissal was tolled during the parties’ second marriage.  The Court of Appeals disagreed with Wife, stating that they “refuse to hold that when alimony and equitable distribution claims based on a first marriage are voluntarily dismissed after a divorce judgment, those claims are indefinitely tolled by a second marriage of the parties so that they may be tucked away and used as a sword in a hypothetical, future action.”  Wife’s claims related to the first marriage were barred by Rule 41(a)’s one year time restriction.